Disaster Microinsurance for Pro-Poor Risk Management: Evidence from South Asia

Stefan Hochrainer-Stigler, IIASA - International Institute for Appl, Rakhi Bhavnani Sharma, Indian Institute of Technology (IIT), De, Reinhard Mechler, IIASA - International Institute for Appl

Abstract


This paper offers a large empirical cross-country assessment of the impact of disaster microinsurance in the South Asia region capitalizing on the prevalence of disaster-prone communities, many of which are mixes of both households with and without disaster microinsurance. Overall, the results of this study show that there is interest in and willingness to pay for disaster microinsurance programs. The products are reaching poor clients, many who are below the poverty line, highly in debt, and employ limited and difficult coping mechanisms after disasters. However, findings have shown difficulties with the claim process and inadequate total coverage with a number of individuals borrowing additional funds from money lenders, friends, and family. In addition, there seems to be a need to review products and potential clients in communities to ensure that although “the poor” are being served, “poorer than the poor” are not being excluded due to costs and information barriers.

Keywords


Microinsurance; Impact assessment; Cross-country study; South Asia region.

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